Fast Charge Part 1 of 2

The genesis of vehicle electrification has been chugging – or more accurately, motoring – forward since the early 20th century. Progress truly charged up during the late 1990’s, when amass market electric vehicle was manufactured by GM, a classic two door coup fondly remembered as the EV1 (image below). This surprisingly sleek two seat coup was powered by lead-acid batteries. (For those classic car lovers who want one, you might be out of luck...the last EV1 we’ve seen for sale was way back in ’03 for around...wait for it...$500,000.)

 
 
Display 1: General Motors EV1 Photos:  Wikipedia

Display 1: General Motors EV1
Photos: Wikipedia

EV1_back.jpeg
 

Pivotal Game Changers

The EV1 put the power-train revolution into ‘overdrive,’ directly challenging the efficacy of the Internal Combustion Engine (ICE). But while the EV1 was way ahead of its time, the normalization of hybrid, electric (or both types of) vehicles has become the rule rather than the exception.

We are in the midst of another sea-change of technological breakthrough

Until recently, the physics of energy storage belied competitive electric propulsion. While storage solutions (also known as batteries) still have ways to go in terms of capacity and efficiency, they already present a clean, efficient, low-maintenance alternative to the ICE.

Indeed, we find ourselves immersed in a brand-new renaissance of innovation, where battery efficiency, reliability, chemistry, charging advancements (more on that later and in Part II), aggressive emission regulations (think: California), battery cell prices, raw material costs, motor technologies and the embracement of OEMs to electricity have created a point of no return. EVs are reaping the fruits of toil from visionaries who understood the merits of electricity long ago.


The Next Phase Could be the Biggest

The wide-acceptance of electric propulsion might not have seen its most exciting act quite yet. The next phase of electric propulsion, in our view, will be the mass adoption of battery powered medium duty (Class 4-6) trucks (see Display 2), which will benefit many times over compared to the benefits seen in Light Duty Vehicles (LDVs).

MDVs poor fuel economy, predictable routes, emission restrictions, the need for fewer parts to break (one less truck = one less delivery cycle), and even the potential to contribute back to the grid make medium duty vehicles the next and perhaps most exiting frontier.

Display 2: Sample Chevrolet Class-6 Medium Duty Truck Photo: Courtesy of Chevrolet


Display 2: Sample Chevrolet Class-6 Medium Duty Truck
Photo: Courtesy of Chevrolet

Trucking is an industry with already thin profit margins, and the effects of escalating and volatile fuel costs are a major cause of concern for even the most conscientious fleet operator. Fuel continues to be the second largest expense for trucking companies, just behind labor costs, therefore, increasing fuel efficiency and minimizing fuel consumption should be a major goal of any truck fleet operator.1


Why So Compelling?

Let’s consider some numbers.

Trucking is an industry with already thin profit margins, and the effects of escalating and volatile fuel costs are a major cause of concern for even the most conscientious fleet operator. Fuel continues to be the second largest expense for trucking companies, just behind labor costs, therefore, increasing fuel efficiency and minimizing fuel consumption should be a major goal of any truck fleet operator.
Source: Rentar Fuel Catalyst

We’ll use the Class-6 Chevrolet C4500 Kodiak as an example. One (1) U.S. gallon of diesel fuel is equivalent to 33.7 kWh, according to the US Department of Energy (DOA). A Class-6 electric truck uses about 1.5-2 kWh of energy per mile. The diesel truck that it replaces uses the equivalent of 6.75 kWh per 1 mile. Thus, the diesel truck uses 3.4x – 4.5x the energy juxtaposed with the electric truck. (Keep in mind, this has nothing to do with cost, simply energy efficiency. Score one for electricity!)

The superior efficiency of the electric power-train on a Class-6 truck yields predictable cost savings (a total cost of ownership analysis will follow in a subsequent post). Consider the cost differential, as measured by the current average cost in diesel fuel ($3.17/gallon, an EIA estimate, see Display 3) versus the per-kWh cost of electricity ($0.11). A Kodiak Class-6 Truck (generously) averages 8.5 MPG (Source: Fuelly.com); thus 80 miles of range requires 9.4 gallons of fuel (about half the tank size), which at $3.17, means $29.83 per fill. Assuming a Class-6 vehicle requires a large 160 kWh battery, a similar range of 80 miles would have “energy” costs of just $17.60, or almost 70% less than a diesel-powered vehicle (see Display 3 for historical trends in diesel fuel prices).

 
Source: EIA, ZEEM estimates and analysis

Source: EIA, ZEEM estimates and analysis

Source: ZEEM estimates and analysis

Source: ZEEM estimates and analysis

 
 

Countervailing Pushback

There are countervailing considerations for and against electric propulsion, and we will publish a comprehensive Total Cost of Ownership (TCO) analysis in the coming weeks.

On a high level, the cost of a 160 kWh battery – while falling – is close to $450 per kWh, or $72,000 for a Class-6 sized pack see Display 4 for a sensitivity analysis).

Despite this large upfront cost, the numbers start to make sense when comparing annual fuel costs vs. electricity costs. Assuming 80 miles per day for an entire year, a truck would travel a modest 30k miles. At $3.25 / gallon, that’s $12,000 in fuel costs compared to less than $6,000 for electricity.

And that is just in a single year. Assuming trucks are driven greater distances, the delta in fuel vs. electricity costs grows more compelling. And of course, this is just a small part of the story; maintenance costs, tax-breaks, CARB emission standards and a host of other benefits point squarely toward the superiority of electricity.


At What Price Stability?

The argument for electricity gets even more compelling energy price volatility is removed as a concern for a fleet operator. As shown in Display 3, above, fossil fuel prices have fluctuated greatly since 1995 (they are currently almost +1 Standard Deviation from the historical average). By contrast, the volatility of nationwide electricity prices, according to the EIA, has barely budged more than a PENNY in either direction!
Source: ycharts.com

The extreme difference in the volatility of electricity and diesel prices over time is explained in Display 5 and Display 6 using simple statistical analyses. Based on annual trends, we created a simple volatility coefficient which supports the notion that over the long-term, diesel fuel prices fluctuate almost 700% more than do per kWh electricity prices.

Such price stability – in favor of electricity – is a gem which is priceless to an operator creating a budget for his or her fleet!

 
Source: Statista, EIA, ZEEM estimates & analysis

Source: Statista, EIA, ZEEM estimates & analysis

Source: Statista, EIA, ZEEM estimates & analysis

Source: Statista, EIA, ZEEM estimates & analysis

 
 

Enter DC Fast Charging

So why aren’t we all electric already? Naysayers generally circle back to two major arguments, which have validity but are quickly falling apart. First, they argue, batteries – even assuming costs come down – can’t provide anything close to the energy output of a tank of gas; and second, but related, even if batteries somehow became as efficient as fossil fuel, charging the things would take FOREVER. True, until now.

Part I of this series can be considered the set-up and Part II, which will entirely focus on the phenomenon which is known as high capacity DC fast charging will be the payoff.

Before we conclude, consider some facts thanks to the data we’ve amassed from companies like Tesla. Charging electric vehicles can often be a painfully slow process. Level-2 chargers (think the 240 Volt 30 amp chargers installed in garages) are designed for batteries with outputs anywhere from 60-120 kWh. Charging a 100 kWh Tesla even at level-2, averages 8 hours (30 miles of charge per hour). Realizing that 8 hours – while still providing an astonishing range in a relatively ‘short’ period of time – would be too long a wait for impatient Tesla owners, the company developed and continues to build a network of Superchargers.

As a general rule, in 30 minutes, a Tesla owner can get about 170 miles of range when using aforementioned Supercharger. Although 30 minutes still might seem like a long time, considering lines at the gas station, payment processing and other issues, it suddenly appears that the Tesla is bringing customers something much closer to that “fill-up” experience.

If DC Fast charging has been a game changer for Tesla, it only goes to reason that it could bethe make or break scenario for larger power-trains, particularly Class-6 trucks. In Part II we’ll examine the charge options available, the costs involved (including installation and maintenance) and even touch on the Vehicle to Grid Opportunities. Until then, stay tuned!

Paul Gioupis & Judah Rifkin

Post sketch by David Kimble